4. Marketing amazonaws com
4. Marketing
4.1 The Market Market ∞ A set of arrangements, which allows buyers and sellers to communicate and trade in goods and service Market orientation ∞ Where a business focuses on the needs of consumers when developing products Product orientation ∞ Where a business focuses on the design and manufacture of the product itself rather than the needs of customers Marketing ∞ Identifying customer needs and satisfying them profitably Market segments ∞ Part of a whole market where a particular customer group has similar characteristics
∞ ∞ ∞ ∞
Age, gender, income, social class, ethnicity and religion can be how businesses divide markets Able to meet the needs of different customer groups Avoid wasting promotional resources by targeting products at customers that do not want them Customers may be more loyal to a business that provides products that are specially tailored for them
Market share ∞ The proportion of sales in a total marker that a business or product enjoys
∞ (Total product or business sales/total sales in the whole market) x 100 Market research ∞ The collection, presentation and analysis of information relating to the marketing and consumption of goods and services
4.2 The Marketing Mix What does the marketing mix mean? A good marketing strategy is one that meets customers’ needs This means that a business must Design and produce high quality products Charge a price that is acceptable to customers Let consumers know about products through promotion Make products available in the right place at the right time
4.2.1 Price Cost plus pricing ∞ Ensures that all costs are covered
∞ It is simple and involves adding a markup to the total costs Skimming/creaming ∞ Launching a product into a market charging a high price for a limited period
∞ The main objective is to generate high levels of revenue with a new product before competitors arrive on the scene Penetration pricing ∞ Introducing a new product and charge a low price for a limited period
∞ The main aim is to get the product established in the market and hope that customers are attracted by the low price and then carry on buying it as the price rises Psychological pricing ∞ Setting the price slightly below a round figure – charging $99.99 instead of $100
∞ Consumers are ‘tricked’ into thinking that $99.99 is significantly cheaper than $100 Loss leaders ∞ Products are sold at a price lower than cost
∞ Popular with supermarkets ∞ To draw customers into a store where they will buy the loss leader in hop that they would buy other products and generate a profit overall Discounts and sales ∞ Cutting prices for short periods
∞ Sales are when goods are sold below the standard price ∞ May be seasonal Destroyer/predatory pricing ∞ Likely to be used by businesses operating in fiercely competitive markets
∞ Setting prices dangerously low to drive out competition
4.1 The Market Market ∞ A set of arrangements, which allows buyers and sellers to communicate and trade in goods and service Market orientation ∞ Where a business focuses on the needs of consumers when developing products Product orientation ∞ Where a business focuses on the design and manufacture of the product itself rather than the needs of customers Marketing ∞ Identifying customer needs and satisfying them profitably Market segments ∞ Part of a whole market where a particular customer group has similar characteristics
∞ ∞ ∞ ∞
Age, gender, income, social class, ethnicity and religion can be how businesses divide markets Able to meet the needs of different customer groups Avoid wasting promotional resources by targeting products at customers that do not want them Customers may be more loyal to a business that provides products that are specially tailored for them
Market share ∞ The proportion of sales in a total marker that a business or product enjoys
∞ (Total product or business sales/total sales in the whole market) x 100 Market research ∞ The collection, presentation and analysis of information relating to the marketing and consumption of goods and services
4.2 The Marketing Mix What does the marketing mix mean? A good marketing strategy is one that meets customers’ needs This means that a business must Design and produce high quality products Charge a price that is acceptable to customers Let consumers know about products through promotion Make products available in the right place at the right time
4.2.1 Price Cost plus pricing ∞ Ensures that all costs are covered
∞ It is simple and involves adding a markup to the total costs Skimming/creaming ∞ Launching a product into a market charging a high price for a limited period
∞ The main objective is to generate high levels of revenue with a new product before competitors arrive on the scene Penetration pricing ∞ Introducing a new product and charge a low price for a limited period
∞ The main aim is to get the product established in the market and hope that customers are attracted by the low price and then carry on buying it as the price rises Psychological pricing ∞ Setting the price slightly below a round figure – charging $99.99 instead of $100
∞ Consumers are ‘tricked’ into thinking that $99.99 is significantly cheaper than $100 Loss leaders ∞ Products are sold at a price lower than cost
∞ Popular with supermarkets ∞ To draw customers into a store where they will buy the loss leader in hop that they would buy other products and generate a profit overall Discounts and sales ∞ Cutting prices for short periods
∞ Sales are when goods are sold below the standard price ∞ May be seasonal Destroyer/predatory pricing ∞ Likely to be used by businesses operating in fiercely competitive markets
∞ Setting prices dangerously low to drive out competition
